The Register UK: iTunes is ‘not a money maker’ | iLounge News

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The Register UK: iTunes is ‘not a money maker’

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By Dennis Lloyd

Publisher, iLounge
Published: Friday, November 7, 2003
News Categories: iTunes

“‘Most of the money goes to the music companies,’ admitted Jobs.

‘We would like to break even/make a little bit of money but it’s not a money maker,’ he said, candidly.

So now we have it on record: the music store is a loss leader. Jobs said Apple would pay its dues to the RIAA, then seek to make money where it could, from its line of hardware accessories. When the conversation turned to rivals such as eTunes and Napster, Jobs said: ‘They don’t make iPods, so they don’t have a related business where they do [make money].’”

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Comments

1

Is it me or is the article just stating the obvious? Jobs already stated that it’s not the store that makes the money but the iPods. How is that any different from the way printers work with all of the profits from the ink? iTunes is still the most lenient as far as DRM and the job Apple has done with it is the most resaonable solution by far compared to the others.

Posted by bg1 on November 7, 2003 at 10:30 AM (PDT)

2

This is old news. Apple started the iTMS to promote Apple as a company, and to sell iPods. They make no profit on the iTMS.

Posted by mongoos150 on November 7, 2003 at 10:33 AM (PDT)

3

don’t they break even? i didnt think it was that bad

Posted by ti on November 7, 2003 at 11:21 AM (PDT)

4

I don’t think they are breaking even YET due to the initial investment in research/technology/engineering/etc… to make the ITMS (and the the Windows ITMS) work.  After that I have to imagine they’d make something off it (though maybe not much)...

Posted by yo on November 7, 2003 at 11:40 AM (PDT)

5

The article actually make another, much more interesting statement, about the future of music licensing, that I’m surprised noone has yet taken up.

The author states his belief that iTunes type services are only a temporary measure, to be replaced by a tax (levied on cds, or income tax, or something else) that will go to music producers, making music downloading legal.

How much would they have to tax…? Who could collect?

It seems like a very strange solution - does anyone know more about this?

Posted by Dave on November 7, 2003 at 8:07 PM (PDT)

6

Yeah, you toke up a couple of times on the pipe and think that you can legislate bread and circuses.  It’s a perfectly sound plan!

Most people don’t have a head for the numbers.  I know I don’t, really.

Posted by Patrick on November 7, 2003 at 9:43 PM (PDT)

7

how cold they tax it?  they can’t do it across the board, becasue there are a lot of people out there that don’t listen to/buy music and therefore would have a big problem with getting taxed for that. 

and besides, I also can’t imagine the goverment (US anyway), imposing a tax to pay private corporations (record labels) royalties…

Posted by oh on November 8, 2003 at 11:55 AM (PDT)

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